1% TDS Calculator for Crypto Transactions
Calculate how much 1% TDS will be deducted from your crypto transactions in India based on the current regulations. This tool helps you understand the actual tax impact of your trades.
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Note: This tool shows only the 1% TDS calculation. Remember that you may still owe additional tax on capital gains (up to 30% + 4% cess) based on your overall profits.
On July 1, 2022, India quietly changed how millions of crypto users handle their trades. A 1% Tax Deducted at Source (TDS) started applying to every sale, trade, or spend of cryptocurrency - no exceptions. It didn’t matter if you held Bitcoin for a day or five years. If you moved it, the government took 1% right at the point of transfer. That’s not a capital gains tax. That’s not a profit tax. That’s a deduction taken before you even see your money. And it’s still in force today.
What exactly is the 1% TDS on crypto?
The 1% TDS is part of Section 194S of the Income Tax Act, introduced in the 2022 Union Budget. It means that whenever you transfer a virtual digital asset - like Bitcoin, Ethereum, or any token - the platform or person handling the transaction must deduct 1% of the total value as tax and pay it to the government. This applies to sales, trades, and even spending crypto to buy goods or services. But it does not apply if you move crypto between your own wallets. That’s just a balance shift, not a transfer under the law.
The deduction happens automatically on Indian exchanges like CoinDCX, WazirX, and ZebPay. You won’t get a bill. You won’t get a notice. The money just disappears from your payout. For example, if you sell ₹50,000 worth of Ethereum, ₹500 gets taken out before you receive ₹49,500. That’s it. No paperwork from you. No form to fill. The exchange handles it.
Who pays it and when does it kick in?
Not everyone is affected the same way. There are two thresholds, and they split users into two groups.
If you’re a regular person - not running a business, not audited by tax authorities - you only hit the TDS trigger when your total crypto transactions in a financial year (April 1 to March 31) cross ₹50,000. So if you bought ₹30,000 in crypto in October and sold ₹25,000 in January, you’re still under the limit. No TDS.
But if you’re a business, a high-income earner, or someone who’s already under tax audit, the threshold drops to ₹10,000. That means even a small trade of ₹12,000 triggers the 1% deduction. This double-tier system was meant to target big players, but it’s confused millions of small investors who assumed the ₹50,000 limit applied to every transaction.
And here’s the twist: if you trade crypto for crypto - say, swap Bitcoin for Solana - both sides pay 1% TDS. That means the buyer pays 1% of the value they’re receiving, and the seller pays 1% of what they’re giving. So a ₹1,00,000 trade ends up with ₹2,000 taken out total. The platform you use handles both sides, but the cost is baked into every swap.
What about crypto-to-crypto trades?
This is where things get messy. Unlike the U.S. or EU, where only fiat conversions are taxed, India taxes every single crypto-to-crypto swap. That includes decentralized exchanges (DEXs) and peer-to-peer (P2P) trades.
On centralized exchanges, TDS is automatic. But on P2P platforms like LocalBitcoins or Telegram groups, the responsibility falls on the buyer. If you buy ₹20,000 worth of Dogecoin from someone on P2P, you must deduct ₹200 as TDS, get their PAN number, file Form 26QE, and send them a TDS certificate. Most people don’t do this. And the government knows it.
The Income Tax Department has made it clear: if you’re trading outside regulated platforms, you’re on your own. No automation. No safety net. And if you get caught, you could face penalties for non-compliance - even if you didn’t make a profit.
How does it compare to other countries?
India’s approach is unique. Most countries tax crypto only when you cash out to rupees or dollars. Germany lets you hold crypto tax-free after one year. The U.S. taxes gains at 15-20%, depending on income and holding period. Singapore doesn’t tax crypto gains at all.
India doesn’t care how long you held it. Doesn’t matter if you lost money. If you moved it, you paid 1%. And that’s not all. In July 2025, the government added another layer: an 18% GST on exchange platform fees. So if you trade ₹2,50,000 worth of crypto and pay a ₹1,000 fee, you pay ₹2,500 in TDS plus ₹180 in GST. That’s ₹2,680 gone before you even touch your balance.
Only Japan has a similar model - but their transaction tax is just 0.4%, not 1%. India’s rate is among the highest in the world for basic transfers.
What’s the real impact on traders?
For casual buyers who hold long-term, the 1% TDS is barely noticeable. But for active traders? It’s a killer.
Imagine a day trader making 100 trades a month, each worth ₹10,000. That’s ₹10 lakh in monthly volume. TDS comes to ₹10,000 per month. That’s ₹1.2 lakh per year - gone - just for trading. That’s not a tax on profit. That’s a tax on activity. It erodes capital fast. A 2024 WazirX study found traders who did over 50 transactions monthly lost an average of 8-12% of their trading capital annually just to TDS.
Many have adapted by splitting trades below ₹50,000. Others moved to international platforms like Binance or Kraken - but now face legal gray zones. The RBI doesn’t ban these platforms, but they’re not regulated. If something goes wrong, you have no recourse.
Why is the government doing this?
The official reason is transparency. Before 2022, crypto transactions were nearly invisible to tax authorities. No one knew who owned what. The 1% TDS forces platforms to report every trade. The result? In FY 2023-24, the government collected ₹1,852 crore in crypto TDS - 27% more than expected.
According to the CBDT, TDS compliance on registered exchanges is now 98%. That’s a win for enforcement. But it’s also a win for control. The system creates a digital paper trail for every crypto movement. That’s valuable for future regulation - or crackdowns.
Some experts, like Dr. Reetika Khera from IIT Delhi, say it’s the only way to bring crypto out of the shadows. Others, like former economic advisor Dr. Vijay Kelkar, call it a “policy mistake” that pushed India’s global crypto market share from 1.5% to 0.7% in two years.
What are the biggest problems users face?
Confusion. That’s the biggest issue.
According to a ClearTax survey of 2,150 Indian crypto users, 63% of salaried people stopped trading after TDS kicked in because they didn’t understand the thresholds. Many thought ₹50,000 was per transaction. Others didn’t know crypto-to-crypto swaps counted. Reddit threads in 2024 showed 78% of respondents were unsure how to calculate their annual limit.
Then there’s the delay. TDS deducted in June doesn’t show up in Form 26AS - your official tax statement - until September or October. That means when you file your returns, you’re guessing how much was taken. Some users reported delays of 90 days. CoinSwitch Kuber had a glitch in 2023 that applied double TDS to over 15,000 trades. Refunds took months.
And if you’re using P2P? You need the seller’s PAN. Many don’t have one. Or they give fake numbers. Filing Form 26QE manually takes 45-60 minutes per month. Most just don’t bother.
What should you do now?
If you trade on Indian exchanges like CoinDCX or ZebPay: you’re covered. The system works automatically. Just check your Form 26AS after July every year to confirm the TDS was credited. If it’s missing, contact the exchange.
If you use P2P or foreign platforms: you’re responsible. Track every transaction. Save timestamps, wallet addresses, and PAN details. File Form 26QE monthly. Keep records for six years. If you’re unsure, hire a tax professional. Costs range from ₹1,500 to ₹5,000 a year.
If you’re a long-term holder: you’re fine. As long as you don’t sell or trade, TDS doesn’t touch you. But if you plan to cash out later, remember: you still owe 30% tax on profits - plus 4% cess - on top of the 1% already taken. That’s a total tax burden of up to 34% on gains.
What’s coming next?
The government is testing a new system. By Q1 2026, NPCI - the same body that runs UPI - plans to launch a pilot that auto-reports crypto transactions to the tax department. If it works, you might not even need to file anything. Your wallet activity will flow directly to the Income Tax Department.
There’s also talk of raising the ₹50,000 threshold to ₹1,00,000. The Finance Ministry received 142 stakeholder requests to do so. But nothing’s confirmed yet.
The proposed Digital Asset Bill 2025 could replace TDS entirely with a centralized registry. But until then, the 1% rule stands. And it’s here to stay.
Final thoughts
The 1% TDS isn’t about fairness. It’s about visibility. The government didn’t want to ban crypto. It wanted to monitor it. And it succeeded. Every trade now leaves a digital fingerprint.
But for the average user, it’s become a maze of thresholds, forms, and delays. The system works perfectly for big exchanges. For everyone else? It’s a burden disguised as compliance.
If you’re still trading in India, you’re not just investing in crypto. You’re investing in a system that takes 1% of your moves - no matter the outcome. Know the rules. Track your numbers. And don’t assume the platform has your back.
Is the 1% TDS on crypto a tax on profits?
No. The 1% TDS is deducted on the total transaction value, regardless of whether you made a profit or loss. Even if you sell crypto at a loss, 1% is still taken. The actual tax on profits is separate - it’s 30% plus 4% cess under Section 115BBH.
Does TDS apply to transfers between my own wallets?
No. Transferring crypto from one wallet you own to another - like from your exchange wallet to your hardware wallet - is not considered a transfer under Section 194S. No TDS is applied. Only sales, trades, or spending crypto to buy something triggers the deduction.
What happens if I trade crypto on a foreign exchange like Binance?
Indian exchanges deduct TDS automatically. Foreign exchanges do not. But if you’re an Indian resident, you’re still legally required to self-report and deduct TDS on your own for crypto-to-crypto or crypto-to-fiat trades. Failure to do so can lead to penalties under Section 201. Most users avoid this by not trading on foreign platforms - or by keeping minimal balances.
How do I check if TDS has been deducted correctly?
Log in to the Income Tax e-Filing portal and view Form 26AS. TDS deducted by exchanges will appear under Section 194S. It usually takes 7-10 business days to reflect after the transaction. If it’s missing after 30 days, contact your exchange’s support team with your transaction ID.
Can I claim a refund if I paid TDS but had a net loss?
No. The 1% TDS is not refundable, even if you had overall losses in crypto during the year. Losses cannot be offset against crypto gains or other income under current rules. The TDS is a prepayment - not a final tax. You still owe 30% on any gains, but you can’t reduce your TDS amount based on losses.
Are NFTs and tokens also subject to 1% TDS?
Yes. The Income Tax Department defines Virtual Digital Assets (VDAs) broadly - it includes cryptocurrencies, NFTs, tokens, and any digital asset with value. Any transfer of these assets, whether sold, traded, or spent, triggers the 1% TDS if the threshold is crossed.
Do I need to file ITR if I only made crypto transactions under ₹50,000?
If your total income (including crypto gains) is below the taxable limit (₹3 lakh for individuals under 60), you’re not required to file ITR. But if you had any crypto transaction above ₹50,000 in the year, you must file ITR - even if you made no profit - because TDS was deducted. The government tracks this via Form 26AS.
Shane Budge
December 5, 2025 AT 13:351% on every trade? That’s insane.